Summary:

On 19 March 2025, the Parliament referred a draft law addressing employment contracts to the Committee on Health, Women’s and Family Affairs, and Social Affairs.  

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The government previously submitted the final draft law to Parliament on 14 March. 

The final draft includes plans to end fixed-term contracts except in the cases of temporary seasonal work, temporary replacement of an employee absent due to illness, leave, or other reasons, or exceptional increase in workload.  

All fixed-term contracts will be required to clearly state the nature of the work and the reason for using this type of contract. 

President Kais Saied stated that these “radical solutions” were reached after discussions of six versions of the draft law, expressing his refusal of the previous drafts. The draft law also involves ending sub-contracts and imposing fines in case of non-compliance. 

Outlook: 

The parliament is likely to approve the draft law presented by the executive branch to avoid tensions with the President and to satisfy popular demands. Frustration with exploitative employment practices is common among Tunisians.  

The law is likely to increase the President’s popularity amongst working class Tunisians, however, many observers and organizations expressed concerns over potential implications on attractiveness to investors. Tunisia is already considered a jurisdiction with significant employee protections and financial obligations for employers, with this latest step risking becoming a deterrent to potential investors hoping to avoid legal and financial burdens. 

The latest changes in the employment contracts may lead investors to prefer other countries where outsourcing to subcontractors and fixed terms recruitment is possible, risking rendering the new law counterproductive. 

The fact that the changes were undertaken unilaterally by the government, consulting with neither the General Union of Labor (UGTT) nor the Tunisian Union of Industry, Commerce and Crafts (UTICA) risks isolating key stakeholders.  

Legal concerns also arise as no criteria are mentioned on how to define “the exceptional increase in workload [which] justifies temporary recruitment.” 

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